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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $407.47 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. RFG, before fees and expenses, seeks to match the performance of the S&P MidCap 400 Pure Growth Index.
The S&P Midcap 400 Pure Growth Index is narrow in focus, containing only those S&P MidCap 400 companies with strong growth characteristics as selected by S&P. As of December 31, 2010, the S&P MidCap 400 Pure Growth Index included 104 of the constituents that comprise the S&P MidCap 400.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 0.05%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 25.40% of the portfolio. Healthcare and Information Technology round out the top three.
When you look at individual holdings, Staar Surgical Co (STAA - Free Report) accounts for about 3.21% of the fund's total assets, followed by Rh (RH - Free Report) and Medpace Holdings Inc (MEDP - Free Report) .
RFG's top 10 holdings account for about 23.71% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P MidCap 400 Pure Growth ETF has added roughly 17.63% so far, and it's up approximately 29.29% over the last 12 months (as of 10/26/2021). RFG has traded between $171.46 and $235.53 in this past 52-week period.
The fund has a beta of 1.17 and standard deviation of 27.97% for the trailing three-year period, which makes RFG a medium risk choice in this particular space. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell MidCap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard MidCap Growth ETF has $12.28 billion in assets, iShares Russell MidCap Growth ETF has $16.66 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $407.47 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. RFG, before fees and expenses, seeks to match the performance of the S&P MidCap 400 Pure Growth Index.
The S&P Midcap 400 Pure Growth Index is narrow in focus, containing only those S&P MidCap 400 companies with strong growth characteristics as selected by S&P. As of December 31, 2010, the S&P MidCap 400 Pure Growth Index included 104 of the constituents that comprise the S&P MidCap 400.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
It's 12-month trailing dividend yield comes in at 0.05%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 25.40% of the portfolio. Healthcare and Information Technology round out the top three.
When you look at individual holdings, Staar Surgical Co (STAA - Free Report) accounts for about 3.21% of the fund's total assets, followed by Rh (RH - Free Report) and Medpace Holdings Inc (MEDP - Free Report) .
RFG's top 10 holdings account for about 23.71% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P MidCap 400 Pure Growth ETF has added roughly 17.63% so far, and it's up approximately 29.29% over the last 12 months (as of 10/26/2021). RFG has traded between $171.46 and $235.53 in this past 52-week period.
The fund has a beta of 1.17 and standard deviation of 27.97% for the trailing three-year period, which makes RFG a medium risk choice in this particular space. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell MidCap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard MidCap Growth ETF has $12.28 billion in assets, iShares Russell MidCap Growth ETF has $16.66 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.